State v. Meta Platforms, Inc.

1

STATE OF WASHINGTON, Respondent, v. META PLATFORMS, INC., formerly doing business as FACEBOOK, INC., Appellant.

No. 84661-2-I

Court of Appeals of Washington, Division 1

December 2, 2024

DÍAZ, J.

"[A] well-informed electorate is as vital to the survival of a democracy as air is to the survival of human life." Gaspee Project v. Mederos, 13 F.4th 79, 95 (1st Cir. 2021). In this case, that foundational principle runs up against a social media conglomerate's First Amendment rights, as well as other federal and state statutory concerns.

The State sued Meta Platforms, Inc. (Meta) for violating relatively new provisions of Washington's Fair Campaign Practices Act and its implementing legislation, namely, RCW 42.17A.345 and WAC 390-18-050 (together, the disclosure law). The disclosure law requires Meta to maintain certain records of the political advertisements it hosts on its platforms and, when requested, to permit inspection of, or to disclose such records to those seeking such information.

The superior court granted the State's motion for summary judgment on both liability and damages, denied Meta's cross-motion, and entered a $35 million judgment against Meta, two-thirds of which consisted of a civil penalty and one-third of which was an award of the State's attorney fees and costs.

Meta appeals and argues that the disclosure law violates the First Amendment to the United States Constitution and is preempted by the federal Communications Decency Act, 47 U.S.C. § 230 (Section 230). Alternatively, Meta argues the superior court miscalculated the damages it imposed. For the reasons below, we affirm the superior court in whole.

I. BACKGROUND

A. Overview of the Factual Background

The parties do not dispute the following factual background. Meta is the parent company of Facebook, Inc., and other international online social media networking platforms, serving over 2 billion monthly users. In pertinent part, Meta allows people and organizations to purchase advertisements directed to Meta's general membership or selected parts of their membership. These advertisements have included political topics, such as promoting candidates for local and state elections. As will be discussed in more detail below, Meta allows advertisers to target their ads to specific users or groups of users, encompassing a wide range of demographic traits, through a self-service tool. These demographic traits include Meta users' age, race, ethnicity, gender, location, interests, and more.

In approximately May 2018, Meta created an "Ad Library." The Ad Library includes advertisements Meta identifies as "political," which it commits to retain for seven years. Meta also retains information necessary to identify each advertiser. Meta further captures each advertiser's intended audience and its demographics, amounts spent, number of "impressions" generated by the advertisements, and more. The Ad Library is publicly viewable online.^[1] It is undisputed that Meta's Ad Library contains much but not all of the information required by the disclosure law.

In June 2018, the State sued Meta for the first time for failing to comply with the disclosure law. In its complaint, the State alleged that at least two members of the public requested information from Meta about political ads hosted on its platforms, and Meta did not provide the information the disclosure law required.^[2]In December 2018, Meta entered into a stipulated judgment, where it agreed to pay $200,000 in damages.

On December 28, 2018, Meta announced that it would no longer accept ads related to Washington electoral campaigns. Despite the ban, however, ads related to political campaigns in Washington still appeared on Meta's platforms and in its Ad Library. For example, through Meta's self-service portal, advertisers placed approximately 1,600 ads related to Washington's 2019 elections on Meta's platforms.

In 2019, two requesters observed political ads on Meta's platforms and contacted Meta by email, requesting information about the ads pursuant to the disclosure law. Both requestors filed complaints with the Public Disclosure Commission (PDC) after receiving incomplete information from Meta. After investigating, the PDC referred the matter to the Washington Attorney General's Office (AGO).

Later and separately, a third requestor also viewed political ads on Meta's platforms, but did not see the same ads in Meta's Ad Library. Between 2019 and 2021, this requestor unsuccessfully attempted to request information about various ads from Meta. Unlike the previous requestors, this person also visited Meta's facilities in-person, requesting to review their records. Unsatisfied, the requestor filed a complaint with the AGO, who forwarded it to the PDC, which returned the matter to the State to litigate.

B. Superior Court History

In April 2020, the State filed a complaint in the King County Superior Court. The State alleged, among other things, that Meta hosted ads on its platforms, but did not provide full or timely information to the three requestors in violation of the disclosure law.

After substantial discovery, including depositions of the parties' experts, Meta and the State each moved for summary judgment in July 2022. As told by the trial court, "Meta has now [asked] the Court to find the statute and regulations unconstitutional, and the State has brought a cross motion for enforcement of those elements of the law."

The superior court granted the State's and denied Meta's motion for summary judgment in October 2022. The superior court also granted the State's motion to enter judgment against Meta, awarding $24,660,000.00 in civil penalties and $10,522,159.59 in attorney fees and costs. The court arrived at these totals by imposing the $10,000 statutory maximum for each of the 822 violations, and trebling both it and the $3.5 million in attorney fees and costs sought by the State because the court found Meta's violations were intentional. The court also granted the State's request for an injunction, which in pertinent part required Meta to satisfy the judgment in 30 days.

C. Appellate History

Meta appeals from the orders on both the summary judgment motions and the judgment, as well as the injunction embedded in each. In November 2022, Meta filed an emergency motion for a stay of the superior court's injunction before a commissioner of this court. The commissioner granted Meta's motion for a stay of the injunction, concluding that reasonable minds could differ about the application of new relevant federal caselaw, and denied the State's motion for a bond.^{[3] [4]}

II. ANALYSIS

A. Summary Judgment

As this is an appeal of the orders on summary judgment, we review whether "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c); see Ranger Ins. Co. v. Pierce County, 164 Wn.2d 545, 552, 192 P.3d 886 (2008). A "material fact" is one upon which the outcome of the litigation depends. Jacobsen v. State, 89 Wn.2d 104, 108, 569 P.2d 1152 (1977). "A genuine issue of material fact exists where reasonable minds could differ on the facts controlling the outcome of the litigation." Ranger Ins. Co., 164 Wn.2d at 552. We conduct our review de novo, performing the same inquiry as the trial court. Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300, 45 P.3d 1068 (2002). We consider the facts and the inferences in the light most favorable to the nonmoving party. Id.

"Summary judgment 'is subject to a burden-shifting scheme.'" Welch v. Brand Insulations, Inc., 27 Wn.App. 2d 110, 114, 531 P.3d 265 (2023) (quoting Bucci v. Nw. Tr. Servs., Inc., 197 Wn.App. 318, 326, 387 P.3d 1139 (2016)). "The moving party meets its initial burden by submitting evidence demonstrating that it is entitled to a judgment as a matter of law." Bucci, 197 Wn.App. at 326. "The burden then shifts to the nonmoving party to set forth 'specific facts which sufficiently rebut the moving party's contentions and disclose the existence of a genuine issue as to a material fact.'" Id. (quoting Ranger Ins. Co. v. Pierce County, 164 Wn.2d 545, 552, 192 P.3d 886 (2008)) (emphasis added).

Summary judgment gauges whether the nonmoving party has met their "burden of production to create an issue" of material fact. Rice v. Offshore Sys., Inc., 167 Wn.App. 77, 89, 272 P.3d 865 (2012). To meet this burden, the nonmoving party "may not rely on speculation [or] argumentative assertions that unresolved factual issues remain." Bucci, 197 Wn.App. at 326 (alteration in original) (quoting Ranger Ins. Co., 164 Wn.2d at 552). Thus, for Meta to survive the State's summary judgment motion, it would have to provide "specific" evidence, and not mere "argumentative assertions," to rebut the State's claim it is entitled to a judgment as a matter of law. Id. at 326.

Meta challenges the disclosure law only as it violates its First Amendment rights and because it is preempted by Section 230. We address each in order.

B. First Amendment

"[T]he Government may not suppress political speech on the basis of the speaker's corporate identity." Citizens United v. Fed. Election Comm'n, 558 U.S. 310, 365, 130 S.Ct. 876, 898, 175 L.Ed.2d 753 (2010).

1. Overview of the Disclosure Law

Given the unique nature of Washington's disclosure law, and the gravity of the various constitutional interests at stake in this case, we first endeavor to provide the necessary historical and procedural framework of the challenged laws.

a. Origins of the Disclosure Law

More than 50 years ago, a bipartisan coalition of nonprofit organizations, political officials, and prominent...